Bank of Korea to help NRB prepare model for economic forecasting

KATHMANDU, June 28: Nepal Rastra Bank (NRB) and the Bank of Korea -- the central bank of South Korea -- have signed a Memorandum of Understanding (MoU) for knowledge partnership program between the two central banks. The officials of the NRB and the BOK signed the MoU amid a ceremony held in Kathmandu on Tuesday. According to officials of the central banks of the two countries, the partnership would enable the NRB in the development of macroeconomic model for economic forecasts for Nepal. Nara Bahadur Thapa, an executive director of the NRB, said that that the partnership between the two central banks would help central bankers and policy makers of Nepal to develop macroeconomic model for economic forecasting as well as enhance the analytical capacity for policy making.

“The practice of economic forecasting model and policy stimulation in Nepal is still at a rudimentary stage. This partnership of the NRB with the South Korean central bank would help us in enhancing the efficiency of our staffers in building capacity in macroeconomic model for economic forecasting,” Thapa, who is also the chief of the NRB's Research Department. Also speaking at the event, Jong Suk Won, a deputy director general at the International Affairs Department of the Bank of Korea, said that the South Korean central bank expects to prepare and handover the macroeconomic model for Nepal by 2017. “We will prepare a suitable and simple model for economic forecasting for the NRB with support of researchers from Yonsei University in South Korea,” Won added.

South Korea has been helping Nepal in various sectors including hydropower, road, infrastructure, health and science since the two countries established diplomatic ties in 1969. South Korea is the four biggest source country for foreign direct investment in Nepal in the current fiscal year, with investment of $104 million in 317 different projects mainly in service and tourism industry, according to the NRB.